Major brokerages retain rate cut expectations after Fed keeps rates steady
Most Wall Street brokerages reaffirmed their rate cut forecasts after the U.S. Federal Reserve kept its policy rate unchanged last month.
The U.S. central bank held interest rates steady as expected and maintained its projection for two cuts this year, though a growing minority sees no cuts at all, and slightly dialed back its outlook to just one 25-basis-point cut in both 2026 and 2027.
Last week, Goldman Sachs said it expects the Fed to cut rates by 75 basis points in 2025, aligning with forecasts from Citigroup and Wells Fargo.
Traders are pricing in 49 bps of rate cuts by year-end, according to data compiled by LSEG. They are penciling in about a 62.8%% chance of a 25-bps cut in September, according to the CME Group's FedWatch tool.
Here are the forecasts from major brokerages after Fed's meeting:
Brokerage | Total cuts in 2025 | No. of cuts in 2025 | Fed Funds Rate (end of 2025) |
Citigroup | 75 bps | 3 (starting in September) | 3.50-3.75% |
Wells Fargo | 75 bps | Starting in September | 3.50-3.75% |
J.P.Morgan | 25 bps | 1 (in December) | 4.00-4.25% |
Goldman Sachs | 75 bps | 3 (Starting in September) | 3.50-3.75% |
Barclays | 25 bps | 1 (in December) | 4.00-4.25% |
ING | 50 bps | 2 (H2 2025) | 3.75-4.00% |
Nomura | 25 bps | 1 (in December) | 4.00-4.25% |
Morgan Stanley | No rate cut | 0 | 4.25-4.50% |
Deutsche Bank | 25 bps | 1 (in December) | 4.00-4.25% |
BofA Global Research | No rate cut | 0 | 4.25-4.50% |
Macquarie | 25 bps | 1 (in December) | 4.00-4.25% |
UBS Global Research | 100 bps | Starting in September | 3.25-3.50% |
